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Poverty and Inequality

It is a pleasure to serve under your chairmanship this morning, Mr. Weir. I begin by congratulating my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones). I am not sure what the opposite of a maiden speech is—perhaps we had better not go there, as they say. However, I wish to pay tribute to her for her speech this morning, and for the huge commitment that she has shown on these issues, both during her parliamentary career and before that in her work on housing in Birmingham. She raised several important points to which I hope to respond. First, she talked about the importance of early intervention. Last week, I was in the constituency of my hon. Friend the Member for Nottingham, North (Mr. Allen), to see the work supported by the Labour Government on early intervention. I saw three particularly good examples of that. One was work with teenagers who were pregnant or new mothers, and excellent work was being done to increase the life chances and opportunities of their babies. Another example was a family intervention project that dealt with families that suffered from a huge, complex interaction of problems. The third initiative was Sure Start and I feel proud—as does my hon. Friend the Member for Birmingham, Selly Oak, I am sure—that there are now 3,500 Sure Start centres. I am deeply alarmed by the proposal repeated by the hon. Member for South-West Bedfordshire (Andrew Selous) to reduce the number of Sure Start centres in this country. My hon. Friend talked about the level of equality and how it has varied over the past 60 years. That was interesting and, like her, I assumed that equality in the country was highest immediately after the second world war. In fact, that is not borne out by the data because high levels of inequality were a spillover from the problems of the interwar years. It was not until between 1975 and 1979—after four Labour Governments—that the lowest inequality ever to have existed in this country was achieved. I know that we are not allowed to use visual aids, but I must refer to a document on the distributional impact of the Labour Government from 1997 to 2010, produced by the independent and highly-respected Institute for Fiscal Studies. It shows that over that period, the effect of changes in tax and benefits led to an increase in wealth of about 12 per cent. for the poorest 10 per cent. of people. The effect on the richest 10 per cent. has been a reduction in wealth of about 8 per cent. Looking beyond the richest 10 per cent. of people to those earning more than £100,000, the impact of the tax and benefit changes has been minus 15 per cent. In part, that is the result of measures taken by my right hon. Friend the Chancellor of the Exchequer, who this month introduced a 50p rate of income tax for those earning above £150,000, a withdrawal of personal allowances for those earning over £100,000, and a restriction on tax relief for pension contributions. In two years' time, there will be a freeze on the higher-rate tax threshold. Meanwhile, at the other end of the income scale, there have been one-off real increases in benefits and increases in child tax credits. From 2012, a new child tax credit for one and two-year-olds is designed to benefit all parents of small children whether they are married, unmarried, separated or widowed. It will not stereotype or ghettoise anyone, or try to make choices between the deserving and the undeserving poor. The hon. Member for South-West Bedfordshire made several remarks and I do not have time to make a thorough critique of them all. At the end of his speech he claimed to be concerned about people on low wages—that from the party which steadfastly opposed the introduction of the minimum wage. He now says that his party is committed to the minimum wage, but he has not said whether it is committed to maintaining it in real terms. The minimum wage benefits one million people, two-thirds of whom are women. Since its introduction in 1999, it has increased in real terms by 23 per cent. If the hon. Gentleman wishes to intervene to say that his party is committed to maintaining the minimum wage in real terms, I would be happy to give way.